China’s Sliding Shanghai Composite Another Red Flag

Last week we questioned just how bad China’s slowdown really is, concluding that it’s probably worse than the official numbers are showing. This week brings more confirmation that the Middle Kingdom is struggling.

China’s Shanghai Composite index, one of China’s two key stock barometers (the other being the Hang Seng) keeps setting fresh multi-year lows. It was up today, but is sitting around more than three-year lows.

It’s been on quite a roller coaster ride, more than quadrupling between 2005 and 2007, only to crash 70% through 2008. It rebounded into 2009, but has been steadily falling since then, down about 40% since July 2009.

Meanwhile, after their own precipitous post-2007 crashes, U.S. stocks have rebounded smartly. As opposed to the Shanghai, which never got within spitting distance of its 2007 highs, the Dow Jones Industrial Average and S&P 500 are both only about 10% off those former highs.